'C
AFD 2 =
AFD 2 M =
FDm (
1 USus, i
FD
FD 1
1 — — I FDus
FDn J us
[4]
AFD 2 s = FDGf FDG-FDus
1 FDS FDn us
AFD2 retains the US level of final demand FDus but now applies the German share of Services as
well as its sectoral mix. Note that the overall share of Manufactures also has to adjust, although
the individual industries retain their US share within it.
Finally, in step 3 the German Manufacturing mix replaces the structure of US Manufacturing to
give ADF3:
AFD 3 =
AFD 3↑
FDM (
FD
FD 1
1--- I FDus
/F J us
(
AFD 3 S
1
FDsθι FDS
__gL GF FD
FD- FDg us
[5]
With all the ‘mix’ changes applied the generic element of AFD3 can be re-written as
AFD 3ι =
FDoi
G, 1
FDo
G
FDus
. This completes the transformations.
19